Issues in Apple’s supply chain are increasing in India and China, with Wistron and Pegatron on trial

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Silicon Valley technology company launched an investigation after local Indian media reported workers destroyed an iPhone factory near Bangalore run by Taiwanese manufacturer Wistron. A local labor minister and a labor organization told CNN Business last week that workers there claimed they were not getting their wages.
Apple (AAPL) said in a statement to CNN Business that an independent audit conducted in response to the violence showed that payment for some employees was delayed in October and November.

“Our main goal is to ensure that all employees are treated with dignity and respect and immediately and in full compensation,” Apple said, adding that it has stopped placing new orders with Wistron as a result of its findings. “We are very disappointed and are taking immediate action to address these issues.”

Wistron did not respond to multiple requests from CNN Business for comment on Monday. However, according to Taiwanese media reports, the company has fired an executive responsible for its operations in India.

“We are removing the vice president who oversees our affairs in India,” Wistron said in a statement according to the Taiwan Times. “This is a new facility and we recognize that we made mistakes during the expansion.”
Apple has faced serious worries about workers in Asia in recent weeks. Last month, it placed another major supplier, Pegatron, on trial for violating the labor law by having some student workers in China work nights and overtime.

Apple said at the time that Pegatron had fired a director in light of the violations. Pegatron also said it had worked to increase surveillance after the violations were discovered, including by arranging for an outside audit.

Allegations against Pegatron have not disappeared, however. Last week, hundreds of workers protested at Pegatron’s facilities in Shanghai and the East China city of Kunshan, saying they owed bonuses and wages, according to human rights organization China Labor Watch.

The organization estimates that up to 500 temporary workers employed by local recruiting firms in partnership with Pegatron gathered outside the company’s Shanghai factory on Saturday to protest, shouting, “Pay the workers, sweatshop!”

According to China Labor Watch, the agencies had promised workers special bonuses if they worked 55 days, but they didn’t complete them after their work was completed.

Pegatron declined to comment on Monday.

Apple suspends new business with iPhone vendor who used students on night shifts

Meanwhile, the riot at the Wistron factory in India made global headlines last week after images circulated on social media that appeared to show people smashing glass panels and taking down CCTV cameras. In a filing with the Taiwan Stock Exchange on Tuesday, Wistron estimated the violence had caused as much as $ 7 million in damage.

In its statement Monday, Apple noted that Wistron had taken disciplinary action and was “restructuring their recruitment and payroll teams” in Narasapura, India. region where the factory is located.

The company has also set up a hotline for employees at the facility to call anonymously if they have concerns, it said.

Apple has long been criticized for the way employees are treated in the supply chain. To improve practices, the US company conducts regular audits, including surprise visits, of its suppliers’ facilities around the world.

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